Accounts receivable is the sum of all payments due to an organization from other business entities or individuals. The management of the organization, and, in particular, accounting, should carefully monitor the status of settlements and try to recover even small debts in a timely manner so that unforeseen expenses do not damage the company's budget. If three years have passed since the obligation (debt) arose and the debt was not paid, there is an overdue receivable.
Overdue receivables should be written off due to the pointlessness of its further accounting in the accounts of settlements with buyers and customers. In order to write off debt unrealistic for demand, the head of the business entity must issue an order on the organization of an inventory of receivables. Then it is necessary to collect a package of documents confirming the presence of overdue debt and the impossibility of collecting it: primary documents, where the fact of the shipment of goods or the provision of services was recorded. In addition - acts of reconciliation with the accounting data of the counterparty, financial claims, correspondence, court decisions (if any).
It is better to carry out an inventory of receivables as often as possible in order to track the validity of the existence of certain amounts in the accounts of accounting and to avoid the appearance of arrears.
Write-offs of overdue receivables can be carried out in one of two ways: by crediting the allowance for doubtful debts or by attributing them to the financial result.
A reserve is a kind of guarantee that a legal entity organizes for itself as a result of an analysis of receivables at the end of the reporting period (year). If there is reason to doubt the good faith or solvency of the client, the head of the organization decides to make contributions to the above fund, thereby insuring against unforeseen situations with a shortage of money in the future that may be caused by unrealistic repayable overdue receivables.
The allowance for doubtful debts is charged to account 91 - “other expenses of the enterprise”. The formation of such a reserve is reflected in accounting by postings - dt 91, dt 63. On a 63 account, an accountant can open several analytical accounts - for the convenience of accounting for each doubtful debt separately. When writing off debt, the accountant posting reflects the decrease in the reserve by the amount of debited debt: d 63, K 62.
Organizations that use the method of determining the tax base "on shipment" have the opportunity to open a reserve for doubtful debts. In the accounting policies of the organization it is also necessary to indicate the presence of this reserve.
As you can see, not every organization has the ability to create such a reserve. Therefore, it is possible to write off overdue debt by directly attributing it to the financial result (reducing it by the amount of debt). Postings: dt 91, set 62. This posting shows the occurrence of expenses of the company due to write-off of the amount of debt of the insolvent debtor. Then, according to d-99 and to-91, the accountant shows a decrease in profit in connection with the above costs.
After cancellation, the accounting of overdue receivables is kept for five years on the off-balance account 007, where the debt of insolvent counterparties is recorded, written off at a loss. This is done to track the possibility of its recovery.
It should be noted that organizations that use the simplified taxation system and calculate the tax base according to the formula “income minus expenses” are not entitled to include expenses incurred in writing off overdue debts as expenses that reduce the tax base.
Overdue receivables in the organization should occur extremely rarely or not arise at all, otherwise the main goal of any organization - maximizing profits - will not be achieved.